RIGA, LATVIA – I am sitting in the Latvian parliament in downtown Riga, waiting for the new Prime Minister Valdis Dombrovskis to show up for an interview. And the words of a local economist are ringing in my ears.
“Anyone who wants to run this country must have a death wish,” he told me on the phone during my prep for this trip last week.
Latvia’s economy is set to contract by around 12 per cent this year – the biggest collapse in Europe. Unemployment could go as high as 25 per cent.
The prime minister’s job is to administer a $9.6bn EU-IMF bailout, which by his own estimation will require cuts in public spending of a massive 20 per cent.
If he makes those cuts, he could have riots on the streets. But if he doesn’t cut, the bailout won’t cover Latvia’s bills and this Baltic republic of just over two million people will go bankrupt.
There is a third way; renegotiating the bailout’s terms. And that will be the prime minister’s most urgent task.
Must go. He has just rushed in. He looks like a man in a hurry and will only give me seven minutes of his time. And who are we to blame him for that?
Valdis Dombrovskis: Reuters
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If Pakistani “presidential Security” is anything to go by, so must Pakistan’s head of state…
Very good point picked-up by Krish on C4 news last night.
[...] This is why Dombrovskishad a sad face when he walked out of the Riga Castle. This is his dilemma on his mind before Dombrovskis takes office: If he makes those [budget] cuts, he could have riots on the streets. But if he doesn’t cut, the bailout won’t cover Latvia’s bills and this Baltic republic of just over two million people will go bankrupt. [...]
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